From the newsletter: AI infrastructure investment is accelerating across the stack, with Lumen completing its Alkira acquisition for AI network connectivity, Nscale securing $900 million for data centre expansion, Dell’Oro reporting record infrastructure growth, and Druid buying Node-H to simplify private 5G deployment.
Some news from today: Lumen Technologies has completed its purchase of networking platform Alkira for about $475 million, as agreed back in May. The transactions will strengthen its ‘east-west’ data center interconnect (DCI) proposition, going between major cloud and AI clusters. Lumen calls Alkira a “bridge” for the firm “between east-west and north-south” AI traffic – as a carrier of both lucrative AI training workloads between cloud regions and new AI inference streams on enterprise delivery networks. The San Jose firm is a “bull’s eye” for Lumen’s M&A strategy, it suggested in May, in terms of both its “strategic alignment and value creation”. The deal is now done.
Separately, Nscale has a new $900 million credit facility to provide flexible liquidity to accelerate its AI data center build-out and capital deployment across the US, Europe, and APAC. “We are building the infrastructure that the world’s largest technology companies depend on to train, deploy, and scale AI, and this facility increases our flexibility to do that at speed and at scale,” said chief and founder Josh Payne. So that’s the hub and spoke, then, right there – per the RCR news beat about the networks that connect the data centers in the new AI world. Big deals, both, geared to bring flex in terms of service programmability and sheer buying power.
Dell’Oro has just issued a research note that says the market for physical infrastructure in data centers grew 28 percent year-over-year to $12 billion in manufacturer revenue in the first quarter – a fifth consecutive quarter of more than 20 percent growth, as AI demand continues to outpace compute supply. This is about the nuts and bolts of data center construction – about $1 billion has been added to the market just from the sale of ‘heat rejection’ tech. Access to power is still the defining challenge for the buildout,” the firm says. Which tells you where the constraint is for the AI story inside the data center; while outside it is the transport network, as addressed by Lumen and others.
Meanwhile, down at the edge of the network (everything?), I’d draw your attention to Druid Software, which has snaffled up RAN software vendor Node-H. This is the killer niche, perhaps – private 5G on enterprise premises, where AI goes to work. A long and informative discussion with Druid chief Liam Kenny gets into it all – about system integration, channel partnerships, enterprise adoption, AI of course; even just the real state of the (post-Nokia) market. Most interesting, he talks about the Node-H strategy to simplify integration of Druid’s core network system with RAN hardware from the big-box shifters like Nokia, and how this will open the market to non-telecoms specialists – including operators, he says, rather tellingly.
